Metro Performance Glass profit cut 94% as pandemic, shutdowns take dire toll

Metroglass has suspended its interim dividend. Photo / Martin Sykes

Interim net after-tax profit for listed Metro Performance Glass dropped 94 per cent from $7.6 million to $419,000 as the company was "significantly impacted by the Covid-19 lockdown".

As previously announced, the company reiterated no interim dividend due to how much it has suffered with shutdowns.

Although sales revenue was the same at $116m, cost of sales rose from $66m to $761m which reduced gross profit from $50m to $45.5m.

Profit before significant items, interest and tax fell from $12m in the half-year to September 30, 2020 to just $3m in the half-year to September 30, 2021.

Disruptions getting products and price rises have hit the business.

"One-off Covid-19 restrictions and ongoing global shipping disruption impacted profitability in New Zealand," the company said.

"As announced in September, profitability has been significantly impacted by extensive Covid-19 restrictions and international supply chain costs in the half. As a result, the board took the prudent decision to not consider a dividend alongside the 2022 interim results," it said

On September 21, the business said three of its four New Zealand glass processing plants had been shut from August 17.

The fourth plant, based in Auckland, was then preparing to re-start and was the largest in the group.

It had been closed for more than a month in what the company said was a traditionally busy and profitable part of the year.

Australian Glass Group's three processing plants were operating and the business is achieving solid sales performance from those but varying state‐by‐state shutdowns and restrictions hit the supply chain, labour availability/absenteeism and profitability.

Today, the company cited that September announcement and said the result was already well-flagged.

Simon Mander, chief executive said: "The group has been confronted with significant short-term challenges in the half. Throughout, our teams have rallied together to deal with the disruptions of international shipping and prolonged Covid-19 restrictions that have had material implications for the group."

New Zealand demand has remained strong and Mander referred to lockdowns being relaxed as vaccination rates rose.

"As the disruptions dissipate, we are confident that activity levels in both New Zealand and Australia will return to previous levels for at least the remainder of the financial year. We also expect to run a shorter Christmas shutdown than last year as the sector looks to recoup lost time in August and September," Mander said.

"We do however remain very aware of the potential risks to our business from another Covid-19 event and will continue to monitor the environment and adapt as required. We anticipate providing guidance on expected results for the 2022 financial year alongside a trading update in February 2022."

Shares are trading around 41c, down 6 per cent annually.